European Rail Giants Fight for Slice of U.S. High-Speed Train Line
Siemens and Alstom vie to supply planned Los Angeles to Las Vegas link
WASHINGTON—In the halls of Congress and the expense-account lunch haunts nearby, two European conglomerates are waging rival campaigns for a $12 billion train to Las Vegas, hoping to finally make a big business out of high-speed rail in America.
Siemens and Alstom are lobbying lawmakers and the Biden administration as they vie to supply high-speed power cars and passenger coaches for the trains of Brightline West, a privately owned venture that aims to connect the Los Angeles exurbs with Las Vegas. The companies are relying on powerful allies to boost their chances, including Senate Majority Leader Chuck Schumer (D., N.Y.), a public champion of Alstom, which has a factory in his home state’s Southern Tier.
Brightline in turn is counting on nearly $4 billion in funding from the $1 trillion infrastructure law to wrap up its financing plan and begin construction of the route by the end of this year—in time for completion by the 2028 Summer Olympics in L.A.
In doing so, the private company would become the first modern high-speed rail service in the U.S., which has long lagged behind other advanced economies in running passenger trains at speeds of at least 186 miles an hour. And it could kick off a boom in rail investment that companies such as Siemens and Alstom have been seeking for decades.
“This to me is the one that kind of gets the U.S. off the ground,” said Marc Buncher, chief executive officer of Siemens Mobility Inc. North America.
Michael Keroullé, Alstom’s CEO for the Americas, said: “I think this is the start of something. It’s really a sign that this is going to become a new way of transporting people.”
Siemens and Alstom are already fierce competitors in high-speed rail, an industry that has grown steadily for decades in Western Europe, Japan and China, as countries linked cities with trains topping 200 miles an hour. The fastest passenger train in the U.S., Amtrak’s Acela express service, reaches a top speed of 150 miles an hour in just a few sections of the Northeast Corridor linking Washington and Boston.
Siemens, Alstom and other train makers long ago established American manufacturing hubs to produce and overhaul intercity, commuter and transit rail vehicles, but the promise of true high-speed rail service in the U.S. has remained elusive despite government efforts to spur its growth.
The heat of the current competition reflects the scale of the opportunity for the train makers, who are hopeful that the infrastructure law—along with projects such as Brightline West and California’s high-speed rail line under construction—will finally build a critical mass for true high-speed rail investment in the U.S. Other proposed routes are much further behind in planning, including a proposal to link Houston and Dallas, in which the private developer Texas Central said in August that it would seek to work with Amtrak.
For Brightline, the Biden administration’s expected release of a first installment of rail infrastructure funding is a critical hurdle.
The company, backed by Fortress Investment Group, said it can privately raise 70% of the financing to build the high-speed line from Rancho Cucamonga, Calif., roughly 40 miles east of downtown Los Angeles, to the Las Vegas Strip.
The train would largely run along existing highway medians to hold down land acquisition costs. The company said it needs $3.75 billion in federal funds from the bipartisan infrastructure law to break ground later this year.
For Siemens and Alstom, the potential grant award represents the opening at last of a mostly untapped market for high-speed trains in the U.S.
The chance to begin booking orders for new train sets has triggered a high-stakes lobbying fight in Washington.
Schumer is a longtime booster of Alstom, which makes trains for mass-transit systems and Amtrak—including the next generation of Amtrak’s Acela express fleet—at a complex in Hornell, N.Y.
Schumer’s aides have pressed Alstom’s case to the Biden administration and Brightline, saying the company’s work developing the Acela fleet gives it a more robust U.S. supply chain that won’t require significant exemptions to comply with the administration’s Buy America rules for infrastructure projects, according to people familiar with the discussions.
Siemens executives have pushed back on those claims, saying both companies will need waivers from the administration to import some elements of their high-speed rail technologies from overseas, where other nations are generations ahead in building out fast rail networks.
“We’re all for Buy America and we’re going to get there, and if the market develops in a certain way it happens naturally anyways,” Armin Kick, Siemens Mobility’s vice president for locomotives and high-speed train sets, said in May at an industry conference in Washington. “But to start it off there should be some concessions made.”
Brightline expects that either vendor would need a waiver to comply with the Buy America provisions until the industry is more firmly established, according to a person familiar with Brightline’s thinking.
Labor is another issue. Alstom’s New York state factory workers are represented by the International Association of Machinists and Aerospace Workers, while Siemens’s largest plant in Sacramento, Calif., isn’t unionized.
President Biden has said that supporting unions is a priority for his administration.
Siemens executives said that the company has unionized facilities in some 30 states and wouldn’t be building Brightline West equipment in Sacramento because that factory is at capacity with other orders.
“Schumer’s a bulldog,” one person familiar with the lobbying effort said. “Given that Alstom is located in New York, and is organized by labor, if he had influence on rolling stock, it’s not a surprise where he would land.”
A spokeswoman for Schumer said he hasn’t advocated for any specific applicant, including Brightline, to win funds from the Federal Railroad Administration, but the senator “has insisted that whatever company gets the funding, the cars be made by Alstom, and most importantly, be American-made with union labor.”
A Federal Railroad Administration spokesman, Daniel Griffin, declined to comment on specific grant applications, but noted that the agency has said it would favor projects that “demonstrate strong labor standards and the free and fair choice to join a union, support workforce development programs and promote inclusive hiring practices.”
Alstom executives have pressed their case in part on their experience building the replacement for the first-generation Acela. That $2 billion program would be the fastest passenger rail fleet in use in the U.S., though at periodic top speeds of about 160 miles an hour, it wouldn’t be a true high-speed system.
“We have the production line, we have trained labor, we have the supply chain—all of that is extremely positive to be able to really deliver on something which is going to be challenging in Brightline: deliver trains by the Olympics,” Alstom’s Keroullé said.
The Acela program has been plagued with delays and development issues. The trains are years behind their original deadline to enter service and still waiting to meet federal regulatory standards to resume testing above 90 miles an hour on the Northeast Corridor.
Siemens’s Buncher said neither company had a true incumbent advantage, since none of the companies that build high-speed rail equipment for Europe and Asia has deployed it in the U.S.
All those designs are “on paper too,” he said, “because no one has made a true high-speed train here.”